Baxalta chief executive Ludwig Hantson said yesterday that Shire’s $30bn takeover bid was a “puzzling” approach that would short-change shareholders.
The CEO made the comments to investors as his counterpart at Shire – Flemming Ornskov – has been meeting with Baxalta shareholders in the last few days to try to drum up support for the transaction, which aims to create a biotech company focused on rare disease therapies.
Hantson insisted Shire’s $45-per-share offer is a “lowball valuation” and comes at a time when Baxalta’s share price – just a few weeks out from being hived off from Baxter – still has to find its natural level.
He also said that negative reaction by its own shareholders means the all-stock offer is “more like $42 per share” and that Baxalta can achieve the gains being promised by Shire from the combination on its own in the next six to 12 months.
Shares in both companies have started to climb this week, suggesting Shire shareholders may be warning to the idea – but Hantson is adamant that there is risk associated with many of the proposed benefits of the merger put forward by Shire.
He does not subscribe to the view that there will be cost-saving opportunities as while both companies are focused on rare and orphan diseases, there is little overlap in their pipelines and these therapies “require focus.”
“One of the advantages the separation from Baxter created is a lean and focused infrastructure here at Baxalta, but an acquirer like Shire isn’t just going to find easy savings from a combination with dissimilar asset,” he said.
Meanwhile, the tax benefits that could accrue from Shire’s domicile in Ireland are “just one financial driver” and could be affected by the continued debate at the US Treasury on the loss of corporation tax revenues resulting from tax-inversion deals, according to Baxalta’s CEO.
There is no point in negotiating with Shire at the current offer price, he continued, which could be interpreted of course to mean that Baxalta might be drawn to discussions if the Irish drugmaker sweetens the deal.
“We are not entrenched or intransigent, but given Shire’s proposal, our board made a considered and correct decision to not engage based on it.”